LEGISLATIVE COUNSEL'S DIGEST

Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists and pharmacies by the California State Board of Pharmacy. A knowing violation of the Pharmacy Law is a crime. Existing law prohibits the operation of a pharmacy without a license and a separate license is required for each pharmacy location.

Under existing law, a hospital pharmacy means and includes a pharmacy, licensed by the board, located within any licensed hospital that maintains and operates organized facilities for the diagnosis, care, and treatment of human illnesses to which persons may be admitted for overnight stay and that meets specified requirements. A hospital pharmacy also includes a pharmacy that may be located outside of the hospital in another physical plant that is regulated under a hospital’s consolidated license as a general acute
care hospital that includes more than one physical plant maintained and operated on separate premises or that has multiple licenses for a single health facility on the same premises. As a condition of licensure by the board, the pharmacy in another physical plant is required to provide pharmaceutical services only to registered hospital patients who are on the premises of the same physical plant in which the pharmacy is located, except as specified. Existing law requires a pharmacy compounding sterile drug products to possess a sterile compounding pharmacy license.

With respect to a hospital pharmacy located outside of the hospital in another physical plant, this bill would redefine a “hospital pharmacy” to include a pharmacy that is located in any physical plant that is regulated as a general acute care hospital.

This bill would authorize the board to issue a license to a hospital satellite compounding pharmacy meeting
specified requirements. The bill would make a license subject to a fee and an annual renewal fee, as specified. The bill would define a hospital satellite compounding pharmacy as an area licensed by the board to perform sterile compounding that is separately licensed by the board to perform that compounding and located outside of the hospital in another physical plant that is regulated as a general acute care hospital. The bill would require a hospital satellite compounding pharmacy to compound sterile drug products for administration only to registered hospital patients who are on the premises of the same physical plant in which the hospital satellite compounding pharmacy is located. The bill would also require the services to be directly related to the services or treatment plan administered in the physical plant. The bill would require a hospital satellite compounding pharmacy to comply with specified requirements relating to, among other things, purchasing, supervision, and recall and adverse effect
notices.

By imposing new requirements on these pharmacies, the knowing violation of which would be a crime, the bill would impose a state-mandated local program.

This bill would incorporate additional changes to Section 4400 of the Business and Professions Code proposed by SB 752, that would become operative only if SB 752 and this bill are both chaptered and become effective on or before January 1, 2018, and this bill is chaptered last.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is
required by this act for a specified reason.

Digest Key

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 4029 of the Business and Professions Code is amended to read:

4029.

(a) “Hospital pharmacy” means and includes a pharmacy, licensed by the board, located within any licensed hospital, institution, or establishment that maintains and operates organized facilities for the diagnosis, care, and treatment of human illnesses to which persons may be admitted for overnight stay and that meets all of the requirements of this chapter and the rules and regulations of the board.

(b) A hospital pharmacy may include a pharmacy that is located in any physical plant that is regulated under the license of a general acute care hospital as defined in subdivision (a) of Section 1250 of the Health and Safety Code. As a condition of licensure by the board, the pharmacy
in another physical plant shall provide pharmaceutical services only to registered hospital patients who are on the premises of the same physical plant in which the pharmacy is located, except as provided in Article 7.6 (commencing with Section 4128). The pharmacy services provided shall be directly related to the services or treatment plan administered in the physical plant. Nothing in this subdivision shall be construed to restrict or expand the services that a hospital pharmacy may provide.

(c) “Hospital satellite compounding pharmacy” means an area licensed by the board to perform sterile compounding that is separately licensed by the board pursuant to Section 4127.15 to perform that compounding and is located outside of the hospital in another physical plant that is regulated as a general acute care hospital as defined in
subdivision (a) of Section 1250 of the Health and Safety Code.

SEC. 2.

Section 4127.15 is added to the Business and Professions Code, to read:

4127.15.

Subject to the requirements of this section, the board may issue a license to a hospital satellite compounding pharmacy. The license fee and annual renewal fee shall be in an amount established by the board in subdivision (u) of Section 4400. The license shall not be transferable.

(a) A hospital satellite compounding pharmacy license shall not be issued or renewed until the location is inspected by the board and found to be in compliance with this article and regulations adopted by the board.

(1) A hospital satellite compounding pharmacy shall compound sterile drug products for administration only to registered hospital patients
who are on the premises of the same physical plant in which the hospital satellite compounding pharmacy is located.

(2) The services provided shall be directly related to the services or treatment plan administered in the physical plant.

(b) A hospital satellite compounding pharmacy license shall not be issued or renewed until the board does all of the following:

(1) Reviews a current copy of the hospital satellite compounding pharmacy’s policies and procedures for sterile compounding.

(2) Reviews the hospital satellite compounding pharmacy’s completed self-assessment form as described in Section 1735.2 of Title 16 of the California Code of Regulations.

(3) Receives a list of all products compounded by the hospital satellite compounding pharmacy since the last license renewal.

(c) A hospital satellite compounding pharmacy shall do all of the following:

(1) Purchase, procure, or otherwise obtain all components through the license of the hospital pharmacy as defined in subdivision (a) of Section 4029.

(2) Satisfy the ratio of not less than one pharmacist on duty for a total of two pharmacy technicians on duty.

(3) Ensure immediate supervision, as defined in Section 70065 of Title 22 of the California Code of Regulations, by a pharmacist of licensed
ancillary staff involved in sterile compounding.

(4) Provide to the board, within 12 hours, any recall notice issued by the hospital satellite compounding pharmacy for sterile drug products it has compounded.

(5) Report to the board, within 12 hours, adverse effects reported or potentially attributable to the sterile drug products compounded by the hospital satellite compounding pharmacy. Unexpected adverse effects shall also be, within 12 hours, reported to the MedWatch program of the federal Food and Drug Administration.

SEC. 3.

Section 4400 of the Business and Professions Code, as added by Section 26 of Chapter 799 of the Statutes of 2016, is amended to read:

4400.

The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:

(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).

(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty
dollars ($930).

(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).

(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.

(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).

(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).

(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be
increased to two hundred eighty dollars ($280).

(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).

(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).

(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal
drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).

(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).

(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating
nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).

(k) The fee for evaluation of
continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.

(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).

(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.

(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or
reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).

(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).

(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one year’s operating expenditures.

(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five
hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).

(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).

(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred
thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).

(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).

(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license or a hospital satellite compounding pharmacy shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight
hundred fifty-five dollars ($1,855).

(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the board’s estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual
cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.

(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing
facility license shall be seven hundred fifteen dollars ($715).

(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the board’s estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with
the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.

(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).

(z) This
section shall become operative on July 1, 2017.

SEC. 3.5.

Section 4400 of the Business and Professions Code, as added by Section 26 of Chapter 799 of the Statutes of 2016, is amended to read:

4400.

The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:

(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).

(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).

(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).

(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.

(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).

(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be
seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).

(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).

(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053,
as a designated representative-3PL pursuant to Section 4053.1, or as a designated representative-reverse distributor pursuant to Section 4053.2 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).

(2) The fee for the annual renewal of a license as a designated representative, designated representative-3PL, or designated representative-reverse distributor shall be two
hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).

(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).

(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).

(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).

(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.

(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).

(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.

(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed
or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).

(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).

(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one year’s operating expenditures.

(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred
twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).

(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).

(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).

(t) The fee for issuance of a retired license
pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).

(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license or a hospital satellite compounding pharmacy shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).

(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall
be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the board’s estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary
costs incurred, the board shall remit the difference to the applicant.

(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).

(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident
outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the board’s estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.

(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).

(z) This section shall become operative on July 1, 2017.

SEC. 4.

Section 3.5 of this bill incorporates amendments to Section 4400 of the Business and Professions Code proposed by both this bill and Senate Bill 752. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 4400 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 752, in which case Section 3 of this bill shall not become operative.

SEC. 5.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.